Question : 17.6   The Markets for Capital and Natural Resources 1) If a : 1388001

17.6   The Markets for Capital and Natural Resources

1) If a firm is the sole employer of a factor of production, it is known as

A) a monopoly.

B) a competitor.

C) a monopsony.

D) an economically discriminating firm.

2) The marginal revenue product of capital is

A) the cost to the firm of renting an additional unit of capital.

B) the change in the firm’s revenue as a result of employing one more unit of capital, such as a machine.

C) the economic rent received by hiring an additional unit of capital.

D) the revenue generated by substituting capital for labor in the production process.

3) Which of the following statements regarding equilibrium in the markets for capital and for a natural resource used in producing a good is true?

A) The marginal revenue product of capital will equal the marginal revenue product of the natural resource.

B) The rental price of capital will equal the price of the natural resource.

C) The marginal product of capital will equal the rental price of capital and the marginal product of the natural resource will equal the price of the natural resource.

D) The marginal revenue product of capital will equal the rental price of capital, and the marginal revenue product of the natural resource will equal the price of the natural resource.

4) The Buda Agri Corporation is the sole employer in rural Hungary. In the labor market, Buda Agri is a

A) monopolistic competitor.

B) monopsony.

C) monopoly.

D) perfect competitor.

5) Economic rent is defined as

A) what you pay to rent your apartment or house.

B) the revenue received by a factor of production with an upward sloping supply curve.

C) the price of a factor of production that is fixed in supply.

D) the surplus received by employing a factor of production in its highest valued use.

6) The town of Saddle Peak has a fixed supply of mountain view lots. In this case, the price per square foot of mountain view lots is

A) determined only by supply.

B) determined only by demand.

C) set by government officials of Saddle Peak.

D) negotiated by environmental groups and property developers.

7) According to the marginal productivity theory of income,

A) the greater the quantity of resources owned by an individual, the greater his incentive to increase productivity and his income.

B) the average income received by an individual who supplies resources is influenced by the resources owner’s marginal productivity.

C) the income received by an individual who supplies labor services equals the incremental benefit generated to the firm by that individual’s labor.

D) the income received by an individual who supplies labor services equals the profit generated to the firm by that individual’s labor.

8) The marginal productivity theory of income states that a person’s total income is determined by

A) the amount and productivity of factors of production the individual owns.

B) how much the individual works.

C) how profitable the firm the individual works for is.

D) how much the individual has inherited.

9) Marginal productivity theory implies that in a perfectly competitive market economy, a worker will receive income

A) equal to the value of her marginal contribution to the production process.

B) that is greater than the value of her marginal contribution to production process.

C) that is less than the value of her marginal contribution to the production process.

D) greater than, less than, or equal to the value of her marginal contribution to the production process, depending on her ability to negotiate with employers.

10) Compared to a competitive market, a firm that has a monopsony in a labor market would

A) hire fewer workers and pay higher wages.

B) hire more workers and pay lower wages.

C) hire fewer workers and pay lower wages.

D) hire more workers and pay higher wages.